It seems over, over there. Just when investors were getting comfortable with international investing, the big gains from stocks in Europe, Asia and Latin America are fading away.

Don't blame it on Rio; the U.S. slowdown is spilling over to the global economy. So much for the theory that global markets aren't tethered to the U.S. Far from it. The old saying still goes that when America sneezes, the rest of the world catches cold.

Except now that the U.S. is the one with the cold, you can guess what that means for overseas markets. Foreign stocks and the mutual funds that invest in them are down far more sharply than their U.S. counterparts.

So should you say goodbye to Rio, or Rome? Hardly. The world economy faces considerable challenges, but U.S. investors need to keep other countries on the map. Moreover, in today's global business environment, it's difficult to put together a purely domestic investment plan. Nor would you want to; overseas holdings are critical to a properly diversified portfolio.

What you might think about instead is altering the type of international investments you own and lightening up on the percentage of your portfolio committed abroad. Consider the fact that big U.S. multinational companies stand taller in turbulent times, and the same would hold true for multinational giants based in other countries.

-- Jonathan Burton, assistant personal finance editor

INVESTING NEWS & STRATEGIES

Ten international stock picks, Buffett style

If it's good enough for Warren Buffett, it should be good enough for you. Or at least it should be if you are looking for an international stock that you can buy and hold for the long term, say from the time you get out of college till you retire. See full story.

Move over, mutual funds

More financial advisers are embracing exchange-traded funds and turning away from traditional mutual funds. If your investments are handled by a financial adviser, this major strategic shift could have big implications for your investment returns and risk, along with your tax bill. See Life Savings.

Dividends provide a big part of your total stock-market return

Stock dividends fell out of fashion in recent years as investors focused on shares that offered more capital appreciation. But with the market not in much of a giving mood, regular cash dividends are gaining new appreciation. See Mutual Understanding.

Even skilled fund managers are struggling

Justin Fuller, equities analyst at investment researcher Morningstar Inc. and manager of the firm's "Ultimate Stock-Pickers Portfolio," says that even managers with a long history of beating the market have struggled under current conditions. See full story.

Pick up the pieces of emerging markets

Steve Goldberg of Tweddell Goldberg Investments says mutual fund investors should expect a bounce back in emerging markets and a pick-up in large-cap performance, and should avoid real estate funds and scale back on small-cap funds. See full story.

Proxy rift shows varying approaches to shareholder rights

A shareholder vote to re-elect the board of directors at J.C. Penney Co. highlights the stark differences in how mutual fund managers approach the issue of proxy voting. See full story.

Pimco names El-Erian CEO

Bond-fund specialist Pacific Investment Management Co. said late Thursday that Mohamed El-Erian will take over sole responsibility as CEO at the end of the year when co-CEO Bill Thompson retires. See full story.

COMMENTARY

Uninsured deposits have no guarantees if your bank fails

This is probably the most sobering, simple and useful investment advice you will ever receive: Do not leave uninsured deposits in any FDIC-insured bank account. See Bill Donoghue.

Taking aim at target-date funds

More than one-quarter of the money flowing into mutual funds during the first half of 2008 went into "target-date funds," issues where the portfolio's asset allocation is designed to become more conservative as its shareholders age. See Chuck Jaffe.

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